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The FTSE 350 next week

| Equity Analyst | 17 August 2017 | A A A
The FTSE 350 next week

No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

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No news or research item is a personal recommendation to deal. All investments can fall as well as rise in value so you could get back less than you invest.

This week has seen global markets recover from the North Korea induced chill of the week before, as Donald Trump instead becomes embroiled in domestic controversy. Hopefully next week will revert to the usual August lull. Among the companies reporting;

  • All eyes will be on BHP’s petroleum business after activist investors called on the group to dispose of it.
  • WPP reports results on Wednesday. Investors will be hoping for evidence of some green shoots in the second quarter, after a weak start to the year.
  • Persimmon will be looking to continue its strong run of positive results, despite worries over the UK housing market growing.

FTSE 350 stocks reporting next week

21-Aug
No FTSE 350 Reporters
22-Aug
Antofagasta Half Year Results
BHP Billiton* Full Year Results
Cairn Energy Half Year Results
John Wood Group Half Year Results
Persimmon* Half Year Results
23-Aug
Hansteen Holdings Half Year Results
WPP* Half Year Results
24-Aug
CRH Half Year Results
Hunting Half Year Results
John Laing Group Half Year Results
Phoenix Group Half Year Results
Playtech Half Year Results
25-Aug
Computacenter Half Year Results

*Hargreaves Lansdown provides research updates on these stocks

BHP Billiton

The collapse in commodity prices at the beginning of last year forced BHP to take emergency action to support the balance sheet, including ending its progressive dividend policy. Those actions, but also a steady recovery over the last 18 months, means the group is now in a far healthier position.

However, unlike rival Rio Tinto, BHP has a sizable oil & gas portfolio, both conventional and US shale. Oil prices haven’t rebounded as strongly as those of other commodities, and that’s left question marks hanging over the division.

Activist investor Elliott International has been calling for the division to be spun out, but while BHP is looking to sell parts of the US Onshore business, investment in more promising portions of the portfolio is rising. Success here will be a key measure for management.

Outside oil & gas, reducing production costs and increased productivity remain the key focus, as they are across the sector.

Register for BHP Billiton updates

View the BHP Billiton Factsheet

WPP

WPP’s net sales rose 4.8% in the first quarter. However, this was primarily driven by the £704m of acquisitions completed in the preceding 12 months. Like-for-like net sales growth was just 0.8%, shy of the group’s target for the year of 2%.

The main drag came from North America, still the group’s largest region. Investors will be looking for signs of some improvement over the second quarter, although there was little sign of a stronger performance in the group’s AGM update in June.

Elsewhere, we can expect to see further spending on acquisitions, which remain central to the growth strategy, while CEO Martin Sorrell’s macroeconomic commentary is always worth a read.

Register for WPP updates

View the WPP Factsheet

Persimmon

There have been a string of positive trading updates in recent months, and investors will be hoping it’s a case of ‘more of the same’ next week.

With second quarter results already published, we know the headline numbers for the half haven’t disappointed. Therefore, if there is to be a spanner thrown into the works, it will likely come from the group’s comment around current conditions, which are looking slightly more precarious. Surveys from The Royal Institution of Chartered Surveyors, Nationwide and Halifax have, to varying extents, all painted a gloomier picture for UK house price growth.

However, it must be said that the areas that seem to be creaking are at the very top end of the market, particularly in the South East. As a nationwide builder with an average selling price of under £230,000, Persimmon has limited exposure to these type of properties. Add in the fact that a significant portion of demand comes from buyers using Help To Buy support, hopes will be high that demand for Persimmon’s new homes remains strong.

Register for Persimmon updates

View the Persimmon Factsheet

Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Thomson Reuters. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Past performance is not a guide to the future. Investments rise and fall in value so investors could make a loss.

This article is not advice or a recommendation to buy, sell or hold any investment. No view is given on the present or future value or price of any investment, and investors should form their own view on any proposed investment. This article has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is considered a marketing communication. Non-independent research is not subject to FCA rules prohibiting dealing ahead of research, however HL has put controls in place (including dealing restrictions, physical and information barriers) to manage potential conflicts of interest presented by such dealing. Please see our full non-independent research disclosure for more information.

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